Marker Therapeutics(MRKR) - 2021 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Marker Therapeutics reported an increased net loss for Q1 2021, but significantly strengthened its financial position through a public offering Item 1. Financial Statements (Unaudited) Marker Therapeutics reported an increased net loss for Q1 2021, while a public offering substantially boosted cash and equity Condensed Consolidated Balance Sheets Total assets and stockholders' equity significantly increased as of March 31, 2021, primarily due to a substantial rise in cash from a stock offering Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $64,507,575 | $21,352,382 | | Total current assets | $67,471,366 | $24,410,865 | | Total assets | $88,362,081 | $45,614,815 | | Total liabilities | $15,867,162 | $18,270,242 | | Total stockholders' equity | $72,494,919 | $27,344,573 | Condensed Consolidated Statements of Operations The company reported an increased net loss for Q1 2021, primarily driven by higher research and development expenses Statement of Operations Summary (Unaudited) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Research and development | $5,643,029 | $3,816,618 | | General and administrative | $3,137,958 | $2,826,995 | | Loss from operations | ($8,780,987) | ($6,643,613) | | Net loss | ($8,779,450) | ($6,485,644) | | Net loss per share, basic and diluted | ($0.16) | ($0.14) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity significantly increased in Q1 2021, primarily due to substantial net proceeds from a common stock issuance - In Q1 2021, the company issued 32,282,857 shares of common stock, resulting in net proceeds of $52.55 million after offering costs of $3.9 million[10] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased, while a significant stock offering provided substantial cash from financing activities Cash Flow Summary (Unaudited) | Cash Flow Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($9,060,261) | ($4,099,066) | | Net cash used in investing activities | ($441,134) | ($99,821) | | Net cash provided by financing activities | $52,656,588 | $550,000 | | Net increase (decrease) in cash | $43,155,193 | ($3,648,887) | Notes to Condensed Consolidated Financial Statements Key notes detail the company's immuno-oncology focus, a significant public offering, cash runway, and an ongoing arbitration proceeding - The company is a clinical-stage immuno-oncology company developing T cell-based immunotherapies (MultiTAA T cell technology) for hematological malignancies and solid tumors[14] - On March 11, 2021, the company completed an underwritten public offering, issuing 32,282,857 shares of common stock for net proceeds of $52.6 million[37] - The company expects its cash of $64.5 million as of March 31, 2021, to fund operations and capital expenditures into the first quarter of 2023[20] - An arbitration proceeding was brought against the company by a broker seeking approximately $1.0 million in compensation for financing transactions from 2018[36] Management's Discussion and Analysis of Financial Condition and Results of Operations The company, a clinical-stage immuno-oncology firm, saw an increased net loss in Q1 2021, but secured funding expected to last into Q1 2023 Company Overview Marker Therapeutics is a clinical-stage immuno-oncology company developing T cell-based therapies, with its lead candidate MT-401 for AML entering Phase 2 - The company's lead product candidate, MT-401 (zedenoleucel), is a MultiTAA-specific T cell therapy for post-allogeneic HSCT patients with AML[55] - The FDA granted orphan drug designation to MT-401 for the treatment of AML after an allogeneic stem cell transplant in April 2020[54] - The company plans to initiate the Phase 2 trial for MT-401 in Q3 2021 and expects to report results from the active disease arm in Q1 2022[55] Results of Operations Total operating expenses and net loss increased in Q1 2021, primarily due to higher research and development costs Comparison of Operations for the Three Months Ended March 31 | Metric | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $5,643,000 | $3,817,000 | $1,826,000 | 48% | | General and administrative | $3,138,000 | $2,827,000 | $311,000 | 11% | | Loss from operations | ($8,781,000) | ($6,644,000) | ($2,137,000) | 32% | | Net loss | ($8,779,000) | ($6,486,000) | ($2,293,000) | 35% | - The $1.8 million increase in R&D expenses was driven by higher headcount costs ($0.6 million), sponsored research ($0.2 million), rent/utilities ($0.3 million), and depreciation for the manufacturing facility ($0.4 million)[63] Liquidity and Capital Resources The company significantly improved its liquidity in Q1 2021 through a public offering, extending its cash runway into the first quarter of 2023 Liquidity Position | | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $64,508,000 | $21,352,000 | | Working capital | $63,324,000 | $18,009,000 | - In March 2021, the company raised net proceeds of $52.6 million from an underwritten public offering[73] - The company expects its cash as of March 31, 2021, will fund operations and capital expenditure requirements into the first quarter of 2023[73] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Marker Therapeutics is exempt from providing market risk disclosures - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item[80] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, with no material changes in internal controls - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective[82] - There were no changes in internal controls over financial reporting during the first quarter of 2021 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[85] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, and other disclosures, noting no material changes or applicable items Legal Proceedings As of March 31, 2021, management believes no legal proceedings are likely to have a material adverse effect on the business - As of March 31, 2021, the company was not a party to any legal proceedings that, in the opinion of management, are likely to have a material adverse effect on its business[86] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes to the risk factors described in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020[87] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no issuances of unregistered securities during the three months ended March 31, 2021 - The company did not record any issuances of unregistered securities during the three months ended March 31, 2021[88] Defaults Upon Senior Securities None Mine Safety Disclosure Not applicable Other Information Not applicable Exhibits The report includes various required exhibits, such as corporate documents and CEO/CFO certifications